The analysis of biomarkers in exhaled breath constituents has recently become of great interest in the diagnosis, treatment and monitoring of many respiratory conditions. Of particular interest is the measurement of fractional exhaled nitric oxide (FENO) in breath. Its measurement is noninvasive, easy and reproducible. The technique has recently been standardized by both American Thoracic Society and European Respiratory Society. The availability of cheap, portable and reliable equipment has made the assay possible in clinics by general physicians and, in the near future, at home by patients. The concentration of exhaled nitric oxide is markedly elevated in bronchial asthma and is positively related to the degree of esinophilic inflammation. Its measurement can be used in the diagnosis of bronchial asthma and titration of dose of steroids as well as to identify steroid responsive patients in chronic obstructive pulmonary disease. In primary ciliary dyskinesia, nasal NO is diagnostically low and of considerable value in diagnosis. Among lung transplant recipients, FENO can be of great value in the early detection of infection, bronchioloitis obliterans syndrome and rejection. This review discusses the biology, factors affecting measurement, and clinical application of FENO in the diagnosis and management of respiratory diseases.